Suvendu Kumar Pati ORDER
Dr. Suvendu Kumar Pati, Member (J)
1. Availment of cenvat credit on Education Cess & Secondary and Higher Secondary Education Cess against purchase of inputs for manufacture from 100% EOU for manufacturing was held inadmissible by the Commissioner (Appeals) that resulted in confirmation of duty demand along with interest and equivalent penalty against the appellant which is being assailed in this appeal.
2. The brief facts of the case is that appellant manufactures bright bar of stainless steel, and mild steel and mild steel wire. It has registered under the Central Excise Act. It availed cenvat credit on inputs for such manufacturing. During investigation made in January 2013, after intelligence gathered by the excise department, appellant was informed that as per provision of Rule 3(1) of Cenvat Credit Rules 2004 credit on Education Cess & Secondary and Higher Secondary Education Cess were not admissible and the appellant should reverse the same. Appellant did the reversal promptly and debited cenvat credit account for ` 15,31,045/- on 23.01.2013 but it was put to show-cause for such availment of allegedly inadmissible credit. The matter was adjudicated upon that resulted in the confirmation of demand under Rule 14 of the Cenvat Credit Rules to the tune of ` 15,31,045/- along with applicable interest at the appropriate rate and penalty of equivalent amount as well as penalty of ` 1,50,000/- on the Director of the appellant Mr. Vinod Kumar Modi by the adjudicating authority i.e. Additional Commissioner, Central Excise, Customs & Central Tax, Nashik II vide his order dated 31.12.2015. Appellant preferred appeal against such finding of the adjudicating authority that was dismissed in respect of appellant company but allowed in respect of the Director absolving the penalty imposed on him. The present appeal is preferred by the appellant challenging part rejection of its appeal in respect of duty demand interest and penalty on the appellant company
3. In his memo of appeal and during course of hearing of the appeal, learned counsel for the appellant submitted that appellant had been availing credit as audit conducted twice found no irregularity in such availment but it had accepted its mistake in availing cenvat credit on Education Cess & Secondary and Higher Secondary Education Cess during the period between February 2011 and March 2011 and reversed the same immediately after it was brought to its knowledge by the excise official and such credit was only taken in its account but never utilised. In citing Larger Bench decision of this Tribunal in the case of JK Tyres & Inds. reported in MANU/CB/0152/2016 : 2016 (340) ELT 193 (Tri-LB) he also pointed out that the issue had attained finality that merely by availing credit which was reversed before utilisation against remittance of duty, interest liability would not arise. He further argued with reference to several judicial pronouncement reported in MANU/KA/0787/2012 : 2012 (281) ELT 192 (Kar.), 2012 (28) STR 214 (Kar.), MANU/TN/3137/2014 : 2014 (310) ELT 509 (Mad.) and in the case of Commissioner of Central Excise, Madurai vs. Strategic Engineering MANU/TN/3137/2014 : 2014 (310) ELT 509 (Mad) that the position of law has become quite clear that mere taking of cenvat credit itself would not compel the assessee to pay interest as well as penalty and consequently the respondent's stand for recovery of interest and imposition of penalty under Rule 14 and 15 respectively of Cenvat Credit Rules cannot succ........